Harriet Harman: The 2007 Senior Salaries Review Body (SSRB) Triennial Review of Parliamentary Pay, Pensions and Allowances was published today. The Government have considered the SSRB report and will today table motions that will be debated in the House on 24 January. The Commons will debate and vote on resolutions to express their views. Final implementation of any opinion on pay is dependent on the Common's agreement to an additional resolution.
	This debate and decision will take place in the context of the current public sector pay policy. MPs and Ministers are paid by the public purse. The Government have committed to ensuring that public sector pay awards remain consistent with the continued achievement of the inflation target of 2 per cent. The Government believe that the principles that apply to public sector pay deals should also apply to MPs to entrench economic stability by holding down inflationary expectations and helping to maintain the economic stability we have seen over the past decade.
	This statement sets out a summary of the Government's position, which proposes that changes to MPs' pay and pensions are consistent with the outcomes sought elsewhere in the public sector.
	The Government believe that there should be a clear, transparent and independent mechanism for setting the pay and pension of MPs. It is inappropriate that MPs should vote on their own pay and pensions. The Government therefore intend to examine options that find objective criteria for determining the appropriate comparator used for MPs' pay awards within a framework that does not require MPs to vote in future years, and accordingly has asked Sir John Baker, CBE—the retiring chair of SSRB—to conduct a review and make proposals on options for consideration. It would be a significant constitutional reform for MPs to be explicitly removed from the process of voting on and determining their own pay and pensions. In some other countries, elected representatives' pay and pensions are determined entirely independently of the legislature. We hope to draw on this international experience so as to find a suitable mechanism that will work within our parliamentary system. We intend this work to be completed so that the House can resolve it before the summer recess.
	The Government are tabling a motion in relation to MPs' pay for the year 2007-08 and seeking the House's support for Sir John Baker's review. There will be separate motions on pensions and allowances.
	House of Commons
	MPs' Pay
	The position on MPs' pay is as follows:
	
		
			 Financial Year SSRB recommendation 
			 2007-08 Increase from £60,277 to £61,820: In addition to 0.66% already in payment, 1.9% backdated to 1 April 2007, paid. Total in-year cost = 2.56% Year-on-year increase = 2.56% 
			 2008-09 Link to the increase in base pay of senior civil servants plus £650 
			 2009-10 Link to the increase in base pay of senior civil servants plus £650 
			 2010-11 Link to the increase in base pay of senior civil servants plus £650 
		
	
	The Government believe the SSRB recommendation on pay for 2007-08 should be staged, with 0.84 per cent. increase backdated to 1 April 2007 and a further 1.06 per cent. backdated to 1 November 2007. This would give a 1.9 per cent. increase across the year 2007-08 and a final salary of £61,820.
	With respect to pay for future years, the Government consider that MPs' pay in the future, including 2008-09, should be determined by a mechanism that is independent of MPs' votes and therefore do not propose taking forward the SSRB recommendations pending Sir John Baker's review of both the appropriate comparator and mechanism for determining MPs' pay.
	SSRB has also recommended increasing the London supplement from £2,812 to £3,500, backdated to 1 April 2007. The Government do not accept this proposal.
	Ministers' salaries
	Ministers' pay is set under the Ministerial and Other Salaries Act 1975. SSRB recommends that the salaries for the Prime Minister, Ministers and other office holders in the Commons should increase more than the salary of MPs. The Government do not accept the proposal and believe that Ministerial salaries should increase at the same rate as MPs.
	Severance pay
	SSRB makes recommendations to change severance pay for Ministers who leave office. The recommendations are that Ministers or other office holders who are reappointed to a salaried Government or parliamentary post within three months of leaving office should keep a pro rata severance payment and the balance repaid. SSRB recommends abolishing the age bar of 65 that currently applies to severance payments.
	Select Committee Chairs supplements
	SSRB recommends that the salary supplements paid to chairs of Select and Public Bill Committees should be increased by the same percentage as the overall increase in MPs' salary. The Government accept this principle and propose that the supplements be increased in line with the increases in MPs' salaries.
	Pensions
	In respect of pensions, the SSRB has proposed the introduction of an optional 1/60th accrual rate. The Government accept this proposal in principle and are prepared to introduce it when the change can be made as part of a cost-neutral package.
	SSRB makes a number of recommendations aimed at limiting the cost to the taxpayer of Parliamentary pensions. These include the 50:50 sharing between Members and the Exchequer of future increases or decreases in pension cost pressures, and restricting the underlying Exchequer contribution to the scheme, other than in respect of the deficit identified at the last valuation, to a maximum of 20 per cent. of payroll. The SSRB also recommends that there should be a review of parliamentary pension provision if the costs are rising significantly such that the 20 per cent. cap on the Exchequer contribution is likely to be breached. These recommendations are consistent with the approach being taken in public service pension schemes generally and the Government accept them. The Government propose that the detail of the arrangements should be worked up in consultation with the trustees of the parliamentary pension scheme so that it can be taken into account by the Government Actuary in his 2008 valuation of the scheme.
	The SSRB recommendations on MPs' pensions apply also to Ministers' pensions and the Government position on these is as set out above.
	SSRB recommends that future holders of the offices of Prime Minister, Lord Chancellor and Commons Speaker are covered by the parliamentary pension and severance arrangements that apply to Secretaries of State rather than the pension arrangements that apply now. The Government accept this recommendation with respect to Prime Ministers and Lord Chancellors. The Government do not propose to implement this recommendation with respect to future Commons Speakers, as they consider the position of Speaker to be substantially different from that of a Prime Minister or Lord Chancellor.
	Allowances
	SSRB recommends that the staffing allowance ceiling should be altered to allow an increase from the equivalent of 3.0 to up to 3.5 full-time, or equivalent, members of staff recognising that the amount of case work for many MPs has increased. The Government accept this proposal.
	The SSRB makes several recommendations on changes to parliamentary allowances including those on:
	Staffing expenditure;
	expenditure on offices;
	communication expenditure;
	expenditure on travel;
	compensation for leaving office and;
	a range of other matters
	Given the detailed nature of the proposals, the Government propose that they should be referred to the Members Estimate Committee to examine in light of observations by the Advisory Panel on Members' Allowances.
	House of Lords
	The SSRB proposes that increases in pay for Lords Ministers are aligned with that of increases in Commons Ministers' pay in accordance with current practice. The Government accept this recommendation. It is proposed that Lords Ministers' pay will be increased by 1.95 per cent. for 2007-08 in line with the proposed increase in MPs' pay, and that from 1 April 2008, increases in Lords Ministers' pay will be made via the same mechanism as for MPs and other Ministers.
	Recommendations on MPs' pensions will also apply to Lords Ministers' pensions—the Government's position is as for Ministers within the Commons. The age bar that currently applies for severance pay will also be abolished for Lords Ministers as for Ministers within the Commons.
	Additionally, the Government agree with the proposal to continue the existing salary arrangements for the Leader of the Opposition, Opposition Chief Whip, Chairman of Committees and Deputy Chairman of Committees. Related to this, the Government accept the SSRB recommendation that seeks to peg the salary of the Lord Speaker on a "mark time" basis pending the next review of parliamentary pay or reform of House of Lords.
	Until recently the Lord Chancellor was head of the judiciary as well as Speaker of the House of Lords, and is entitled in legislation to a salary £2,500 higher than the Lord Chief Justice. Given the post no longer now has those functions, the SSRB recommends that where the post of Lord Chancellor is held by someone who also holds another ministerial post, that person should receive only the salary for the ministerial post. The Government accept this recommendation.
	The SSRB made three recommendations on Lords allowances: on the extension of the spouses', civil partners' and children's travel entitlement to include a named partner; for reviews of the definition of parliamentary business for the purpose of the subsistence allowance; and for a review of IT support for Members. These recommendations should be considered in the first instance by the House Committee.